It was always going to be a tough mid-term election, based on history. Only in 1934 and 2002 did a first-term President’s party not suffer Congressional losses. In those two cases, the public rallied to an existential crisis, the first domestic and the second, foreign. In the wake of the January 6, 2021 insurrection, following four years of Donald Trump’s norm-shattering behavior, one might reasonably have hoped that voters would recognize 2022 as a third existential crisis, the threat to our democracy. But that threat has not been the focus of these mid-term elections.
As James Carville observed in 1992, “It’s the economy, stupid.” The adage seems to be holding. For many Americans, putting food on the table is budget-busting, and heating bills are looming larger. Gas prices, while lower than this summer, are going up again. For decades, inflation was low enough that most Americans could ignore it. It’s hard to ignore it now, but the reasons for its dramatic jump are complex.
The GOP has been blaming “Biden-flation” for all the problems, and the Democrats, short of attacking corporate greed, have not effectively fought back. Nor have the news media done a good job of explaining the situation.
While some of the stimulus dollars did overshoot their goals, the spending brought the nation back from the brink of economic disaster during the worst of the pandemic. (Seldom do we hear that the $2 trillion CARES Act and nearly a trillion-dollar Covid relief act were signed into law by President Trump.)
Economists at the Fed attributed only 2.5 percentage points of the 8+ percent increase in the inflation rate to all that stimulus spending by two presidents. Inflation in Europe has been running at nearly 11 percent, and Biden’s program was not present there. It’s a global problem.
During Covid, businesses around the world ground to a halt or, fearful of an imminent recession, dramatically reduced production. Factories stopped producing. Oil companies stopped drilling. Then Russia invaded world breadbasket Ukraine, reducing Russian oil supplies and curtailing the availability of Ukraine-grown wheat and other products. Demand chasing fewer supplies put upward pressure on prices. Remember the miles of cargo vessels outside Long Beach and other ports clogging the supply line?
Some studies have shown that 40 percent of the rise in inflation is caused by vast increases in corporate profits. Shell, Exxon, Chevron and Tyson Foods are among the companies reporting record-high levels of profits in 2021. But that too is not the whole story.
The Fed (which the President does not control) was unwisely slow in raising interest rates to curb inflation. And now that they’ve taken action, interest rates for housing and other borrowing are dramatically higher, causing more anxiety and disgruntlement. Today’s fourth jump may help curb inflation long-term but won’t allay short-term recession concerns and surely won’t play well at the ballot box.
President Biden has failed to be an effective explainer-in-chief. He and fellow Democrats have been equally slow in articulating a unified message to the American people. Only recently have they begun to emphasize how they passed legislation to reduce prescription drug costs The economy added more than ten million jobs in 2021, and unemployment remains a low 3.5 percent. Solid efforts are underway to bring manufacturing jobs, including computer chips, back to the United States. But much of Biden’s legislative successes will not be felt by November 8 and will only be feathered in over time. Next year Social Security beneficiaries will get their largest increase in 40 years, and yet it’s not keeping up with inflation.
Democrats are right to tell people what they have achieved. But that’s not enough. People struggle with the cost of living. They aren’t optimistic about the economy or their lives in general. Democrats must be proactive and remind people in stark terms what it will mean if the GOP gains control of Congress.
The Republicans have promised to hold debt ceiling negotiations hostage to harsh cuts in entitlement programs. They are salivating at the prospect of hacking away at Social Security and Medicare if they can do so. That’s hardly the right approach to bringing down the cost of living.
What else do they have to offer? Their main proposal seems to be cutting taxes, which, of course, is absurd at a time of high inflation. Ask shortest-ever British Prime Minister Liz Truss how practical that idea is. And the tax cuts the GOP is advocating here are not broad-based. Their plan is to make permanent the grossly inequitable Trump tax cuts. In short, they have no plan to cut inflation. None at all. Sadly, the news media rarely push Republican candidates on their failure to answer the problem.
Weak Democratic messaging on topics from inflation to crime, immigration, and democracy itself appears no match for the millions of unrestricted shadowy PAC dollars cascading into GOP campaigns and new forms of social media micro-market targeting, more effective than ever.
Poor GOP candidate quality seems less important than feral tribal loyalty. Up and down the ballot, the frightening radicalization of the Republican Party appears to have been normalized. As of this writing, it appears that the GOP base is more enthusiastic about voting than Democrats or Independents. Even young people, who may not understand that elections have consequences, and those who claim to be environment-priority voters appear to be less interested in participating this year than other groups. I hope my worst fears are not realized on Tuesday. It’s a sad day when we look to Brazil for hope.
I welcome your feedback in the comments section. To be alerted when a new blog is posted, click on “Follow’ on the home page on marjoriearonsbarron.com.